Tips for coping with market volatility

Information to help New Zealanders
cope with the current situation in the financial world has
been posted on the Retirement Commission’s independent
money guide website www.sorted.org.nz (see below).

Retirement Commissioner Diana Crossan says the tips have
been developed following calls from people who are nervous
about managing their money in the current environment. She
says investors need to think long term and remember that
financial markets are volatile.

“I would urge
people to continue to plan for their retirement, despite the
current turmoil. Regardless of whether we are living in good
or bad times, New Zealanders need to prepare for their
future financial security,” said Diana Crossan.

“It’s also important not to panic or make rushed
decisions, but at the same time don’t put it off. It’s
better to do your homework and get as much information as
you can so you are in a position to make well-informed
decisions about your finances.

“For some of you this
might mean sitting down and re-doing your budget so you have
a clear understanding of your financial situation. Sorted
has calculators to help you do this, including a budget
calculator and a calculator to work out your net worth.

“If you find you can’t meet your commitments, the
first step is to contact your lender or bank. If you can
reduce spending, you might be able to consider using the
surplus to pay off debt,” said Diana Crossan.

Sorted
has information to help New Zealanders get financially
sorted, regardless of their financial situation and stage in
life. There’s information on how to set short, medium and
long term goals and the importance of planning.

The
Retirement Commission has also just produced a new booklet,
Sorted - Your guide to getting there, which provides
information on goal setting, making a budget and planning
for retirement.

Market Volatility: What do I do?

• Don’t panic. Take time to make considered and
informed decisions

• Have a close look at your financial
situation. Do a detailed budget of all your income and
spending.

• See if you can reduce spending to pay off
debt.

• If you can’t meet your commitments, talk to
your lender/bank about your options as soon as
possible.

• Try not to miss any payments to avoid
getting a bad credit rating.

• If you are having trouble
paying your credit card bill, stop using your card.

•
Don’t get a new credit card to pay off the bill on your
current credit card. If you can’t afford the repayments,
see if you can re-finance your debt into a lower interest
loan.

• Remember that shares or a fund that includes
shares are generally best suited for long term investing and
will be affected by market fluctuations.

• Find out what
your risk profile is so you can make investment decisions
that you are comfortable with.

• Don’t be put off from
saving, especially for the long term. By saving regularly
and earning interest on your savings, even the smallest
amounts can grow substantially.

• Use the sorted.org.nz
calculators to help you with your decision making. Do your
homework so you can make well-informed financial decisions.

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